Problem 1

On July 1, 2023, Swanson Corporation purchased a parcel of land as a factory site for $150,000.

An old building on the property was demolished and construction began on a new warehouse that was completed on October 15, 2023. Costs incurred on the construction project are listed below.

Cost of building construction $600,000

Title insurance 1,500

Cost of constructing a driveway. 18,000

Legal fees to purchase land. 4,000

Architects fees. .. 20,000

Cost of demolishing the old building.. 7,500

Proceeds from salvaged materials from building demolition.. (2,500)

Delinquent property taxes, January 1- June 30, 2023.... 3,000

Interest during construction on the construction loan.. 12,000

Cost of parking lot and fencing 70,000

Cost of grading and filling the land.. 9,000

Excavation costs 70,000

Required:

Determine the cost of the land, the building and the land improvements. Please show your work for partial credit.